So, by my count, (NASDAQ:OSTK) loses round one. According to Gradient Analytics, the SEC has dropped its investigation into whether Gradient was manipulating Overstock. Though this was technically an SEC gig, the investigation was very clearly a reaction to Patrick Byrne's original Rocker/Gradient lawsuit and his now-legendary "Sith Lord" media blitz.

The New York Post story even claims that the SEC offered to send Gradient a "rare 'No Action' letter."

This is good news. But it's not enough.

If you'll recall, a few months back, according to an article in the Wall Street Journal, yours truly allegedly made it onto an SEC subpoena sent to Gradient. Which was pretty odd, given that I'd never had any contact with the company, and the one attempt I did try to make after all heck broke loose -- "Can I get a copy of the research reports that the lawsuit cites?" -- didn't even merit a response.

The only explanation for why I made it onto an SEC subpoena, if I did, seems to be that I'd made it onto Patrick Byrne's enemies list for the high crime of being skeptical of Patrick Byrne and

This is a prime example of why this entire affair needs more attention than it's getting. It's pretty obvious to me that what Byrne wants is to muzzle his critics, and one of the best ways to do that is get them dragged into legal battles he wages on company time and the company dime. Another way is to simply smear them publicly, betting that they won't have the money or the energy to fight back.

Because these suits are expensive to fight even when you know you've got nothing to hide, they encourage skeptics to simply keep their mouths shut. And even if you don't get sued, who want the hassle of raising Byrne's hackles?

I submit that if you take a look at the coverage of Overstock on before and after Patrick's crusade against "captive" journalists, you'll see all the evidence you need of the chilling effect it had here. How many others clammed up rather than risk the wrath of Byrne?

Overstock is a former selection of both the Rule Breakers and Hidden Gems newsletters.

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At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.